Northwest Airlines, Inc. General Offices Minneapolis-St. Paul International Airport Saint Paul 11, Minnesota OFFICERS* DONALD W. NYROP President PAUL L. BENSCOTER Vice President-Transportation Services ROBERT A. EBERT Vice President- Personnel A. E. FLOAN Vice President and Secretary DONALD H. HARDESTY Vice President- Finance and Treasurer WM . E. HUSKINS, JR. Vice President-Orient R egion FRANK C. JUDD Vice President- Maintenance and Engineering M . JOSEPH LAPENSKY Comptroller DALE MERRICK Assistant Vice President- Properties EMORY T. NUNNELEY, JR. Vice President and General Counsel C. L. STEW ART Vice President- Economic Planning ROBERT J. WRIGHT Vice President-Sales DIRECTORS* CROil HUNTER Chairman of the Board, Northwest Airlines, Inc. St. Paul, Minnesota JAMES H. BINGER President, Minneapolis-Honeywell R egulator Co. Minneapolis, Minnesota HADLEY CASE President, Case, Pomeroy & Company, Inc. New York, ew York MORTON H. FRY Senior Partner, R iter & Company New York, New York JOSEPH T. JOHNSON President, The Milwaukee Company Milwaukee, Wisconsin MALCOLM S. MACKAY President, Foothills Company Roscoe, Montana CLYDE B. MORGAN Chairman of the Board, R ayonier, Incorporated New York, New York DONALD W . NYROP President, Northwest Airlines, Inc. St. Paul, Minnesota ALONZO PETTEY$ President Farmers State Bank Brush, Colorado C. FRANK REAVIS Partner, Hodges, Reavis, McGrath & Downey ew York, New York ALBERT G . REDPATH Partner, Auchincloss, Parker & Redpath ew York, ew York WILLIAM STERN President, Dakota National Bank Fargo, North Dakota LYMAN E. WAKEFIELD, JR. Vice President, First National Bank of Minneapolis Minneapolis, Minnesota ALBERT J. WEATHERHEAD, JR. President, The Weatherhead Company Cleveland, Ohio *As of March 1, 1962 REGISTRAR: The Chase Manhattan Bank, New York, N. Y. TRANSFER AGENTS: Bankers Trust Company, New York, N. Y. STOCK LISTED: Common Stock listed on New York Stock Exchange and Midwest Stock Exchange. Preferred Stock listed on New York Stock Exchange. PRESIDENT'S LETTER TO O R STOCKHOLDER : For Torthwest Airlin , the year 196 I " a~ a diffi ult el profitable 11 . Operations and revenue were curtailed a. a re ult of a trike by flight engin during the early part of the year. P covery from the January-February . trike was, of necessity, slow and revenues did not reach prior-year levels until May, 1961. Even after such re overy, your ompany along with all the dome Lie trunkline , found a oft market for air tran portation lacking the growth experienced in earlier year . De pite redu ed revenue and gr atly increa. ed depreciation and int r L charge , an effective program of co t control and pecial attention to customer ervic enabled your 'ompany to earn a ] 961 n t profit of '3,661,139 more than twice the arning of the previou. year. Our jet re-equipment program wa completed during the ear- 18 n w pure jet and jet-prop aircraft wer placed in ervice five pi ton aircraft received major modification to enhance and extend their revenue production and 13 surplu pi ton engine aircraft were old. s a re ult of our re-equipment program, we nter 1962 with nearly 90 p r cent of our available eat-mile in modern turbine-powered equipment. Only one year earlier, that percentage wa approximately 30. More than 127,000,000 in capital fund have b en u ed in the acq ui ition of the current jet and jet-prop fleet-nine Boeing 720B fan-jet , five Douglas D -8 inter- continental jets and 16 Lockheed Electra II jet-prop . 11-cargo, combination pa enger-cargo and high den ity touri t pa enger er ice no, are pro ided in our five recently converted D '-7C/ F aircraft. In addition, our remaining DC-6B and D -7 fleet augment ervice in many market and provide the only ervice in the 10 per cent of our citie not capable of supporting turbine-powered ervice. Your Company, in addition to the ub tantial hange brought about by it flight equipment acqui ition, modification and di po ition program, ha taken important forward teps on th ground. In 1961 " e made internal organizational change to improve efficiency, technology and r ice. N maintenance and flying concept have been introduced. All cu tomer ervice now i concentrated in one department for unified and effecti e direction. :Move into even new terminal and hangar facilitie , ere comp! ted. Our new ain Base- integrated General ffice, overhaul, hop , tore and hangar facility at the Yiinneapoli - t. Paul International irport- no, is occupied and functioning fficiently and eff ectiv ly. The 1961 re ults and the economic tability of North, et irline are the result of your continuing . upport. I appreciate the under tanding, loyalty and cooperation which have contributed to th favorable condition outlined in thi report. incerely, March l O 1962 FINANCIAL RE SUL TS ,n In 19 0 61, your Company earned a net_ profit of , .:>.661. l.J9. more than doubl the net earnma of the pre,iou year. Th 1961 earning were achieved in th lace of a decline in total re,enue of more than 12 000 - 000, the re ult of an ext nded trike durina the early part of the year. nother factor aff ting 1961 re ult wa the lack of 0 -rowth in dome tic pa enaer traffic with all dome tic trunkline recordino- an increa e of onl 1 per ent over ]960. Off e_t~ino th~ ~ adver e factor were the improved compet1tl\e. l?o 1llo:1 affor~ed by integration by North- \\'e t of add1t1onal Jet and Jet-prop aircraft into our fleet and a continuance of co t-control policie under , hich operatino- expen e at e,ery le,el are monitored care- ft~lly and continually in order that we may provide a !11gh tandard of ervice at minimum co t. Earning . The 3,661 139 profit for the y ar 1961 a~11?unted to 2.21 per common hare. after preferred d1_\'ldend of 592 245. Thi compare mo t favorably with net earnina of 1,625,765 for 1960 "hich amounted to .75 p r hare after preferr cl dividend . Your om- pany' aai~ in net earning wa accompli heel de pite mcrea eel mtere t charo-e which totaled 4 352 867 in 1961, compared with 2,683 480 in 1960. ' Included in net amino- for both year are profits, after taxe , on di po al of flight equipment and pare part - 1,198,035 in 1961 and 699 852 in 1960. _ O peration in 1961 provided internal ca h generation of 23,2 1,898, made up of the net earnina of 3 661 139 plu a h flow from depreciation and amortization ( 17,117,959 ) and deferred income taxe ( 2 512,800). Ca h flow from the ame ource amounted to $16.826,- 330 in 1960. R ,. nue . , 111,052.512 Total op 1 a ting re, enue in 1 61 were r 12 .308.967 le than in 1960. Thi 35th ANNUAL REPORT STOCKHOLDERS TO d~ lin ~a a dire_ L re ult of the prolonged trike by ~1ght_ engmeer which began in October, 1960, on DC-8 Jet aircraft and pread to all type of equipment on January 9, 1961. Only partial ervice could be con- du ted during the hutdown, which extended through January and February. er ice wa re tored on :March 1, 196_1 and chedule were augmented further in the fol_lowmo- month . By ay revenues again reached pnor-y ar level . Operating and traffic figures how similar effects of the early-1961 strike with total re enue plane miles down from 46,963,000 in 1960 to 31,658,000 in 1961. R evenue pa enger-mile declined from 1,654,000 000 to 1 362,000,000 and cargo ton-mile (mail, freight, ex- p~e ) from 58 528,000 to 51 203,000. De pite uch de- elm , however, load factors were maintained at rela- tively favorable le, 1 with the result that a pas enger load factor of 52.1 per cent wa achieved in 1961. Thi wa accompli heel de pite the inevitable difficulty en- countered in eeking to regain Northwe t' comp titive po 1t10n after a long trike period. During the la t half of 1961 we obtained revenues of 930,000 from operation of cheduled military charter. over our_ route to Ala ka. Thi contract, which pro ide a 1:b tant1al revenue ource or utilization of pi ton-engined aircraft extend to June 30 1962 and renewal beyond that date i being ought. The i il eronautic Board ha approved an increa e of 3 per cent in dome ti pa enger fare effective Feb- ruary 1 ] 962. Adju tment al o have been made in dome tic air freight rate to increa e the yield from II:all-volurne hipm nt and to reduce the rate on large h1pment o that we will attract a areater volume of thi type of traffic. Expen e_. . perating xpen , including depr ciation a1:d amort1zat10n were $101 330 626 in 1961, compared , 1th 118,867,785 in ] 960. Thi reduction of 17 537 - 159 more than off et the operating revenue decli~e of 12.308,967, ,,ith the re ult that op rating net income m 1961 ex eeded that of 1960 b 5.228 192. Deprecia- lion and amortization charge of 17 117 959 in 1961 w re 2 704 42-1 mor than in 1960. ah op rating exp n actually \\'er r du ed by 20.241, 83 from 1960 to 1961. 11 cat gorie of operatina expen e lroll l fully both during the trike and in th month following. a re ult 1961 unit operating e, p n of 27 .59 per a,ailable ton-mil were le than th co t of 27. 72 recorded in 1960. de pite th burd n of fi -ed o t which had to be borne b an extrem Iv low apa ity rnlume in early 1961. , Total company employee numbered 5.803 at the end of 1 61 a reduction of 1 J 15 from the le\' 1 pr c ding the tart of the flight engineer ' trike in 1960. tockholder ' Equity. Th net ,,orth of th ompany increa ed from 52,192 566 at the end of 1960 to 5+.176.525 a of December 31. 1961. Book \alue of common tock \\a 30.9+ per hare at D cemb r 31, 1961, an increa e of 1.40 from the book \alue of 29.5+ at De ember 31. 19 0. From net earnina of 0 .661,139 regular quarterly dividend totalina .80 per hare for the year were paid to holder of common tock continuing a poli y follow cl con i t ml ince 1955. Divid nd on the 25 par value 5 per cent omertibl umulati, Pr ferr d to k al o \\' re paid on quart rl due dat in 1961. fter paym nt of di\'idend there remained from 1961 earnina an amount of 1 960.373 added to retained earnina __ EQUIPMENT AND SERVICE Durina 1961. ~ orthwe t . ir1ine completed a t\rn-year proaram for acqui ition of a modern turbine-powered fleet compo ed of a total of 30 new aircraft and an outlay of more than 127.000.000. In th pa t year. your ompan accept d d 1i\ery of it fifth Doug1a D -8 long-range jet nine Boeina 720B medium-range fan-jet and eight additional j t-prop Lockheed Electra II' . Too-ether " ith remainin pi ton aircraft ,,e now have a di\er ified fleet po e ing a b1 oad ranae of performance chara teri ti to meet the ,aried enice need of our dome tic and international route y tern. 11ore than 90 p r c nt of our citie now benefit from ::'-l orthwe t irline en-i e in turbine-po\\'ered aircraft and more than 50 per ent ha,e D -8 or 720B pure-jet chedul . Thi larae- cal equipment tran ition wa accompli hed in the hort pan of 28 month from ugu t. 1959 when ::'\ orthwe t introduced it fir t Electra flight . to J anu- an. 1962 when nearly 90 p r cent of all a,ailablc at- mile were operat d in turbine-power d aircraft. :\'"orth\\e t now offer on -plane pur -jet n-ic in / / eparate city-pair mark t . For. xam_pl Ne" Yo1:k en- joy X \\ j t fliaht to Detroit; M ilwaukee. ,h1 ago, One of Northwest Orient A irlines' Boeing 7208 fan-jet airliners is towed info a Main Base hangar af Minneapolis- St. Pau l /nfernafiona l A irport for routine work. Hangar is one of five at the Main Base, each 320 feet wide and 160 feet deep. Each hangar will accommodate fwo huge iets or three of Northwest's propeller-driven aircraft. ).1inneapo1i - t. Paul. pokan . Portland. eattle-Ta o- ma. nchorage; Tokyo and ricnt point beyond Tokyo. 1'Iiami ha on -plane jet ervic on N orth"e t to ampa. , t. P ter bura. tlanta. hicaoo. 1vi ilwauke . 1'1inn - apo1i - t. Paul Portland and , attle-Ta oma. In 1961 orth,, t. with it expanded j t Beel, wa able t in rea e direcl jet n ice betw en citie in th ea tern part of the 'C nited tate and the rient. ~ ew York now ha three "polar flight a week to okyo via n horage; with a re ulting N w York-Tok 10 fly- ing time of 13 hour - four and a half hour fa ter than any oth r airlin . ,hi ago ha on polar 0ioht p r w ek. non top to n horaae and on to the rient. 1n addition both citi . a well a Wa hinaton, D . ,. !Jetr it, Minneapoli - t. Paul and other major point.. hav daily n-ice to and from the Orient \'ia attle- Tacoma. hicago' daily rvi e i non top to the latter point. with the am plane ontinuina on to n horaae ,,ith en-i beyond to th ri nt ,,bile Ne,, York , i. ,ia a non top flight to eattle-Ta oma and a dir t on- n tion to the hicaao-oriainatin flight. en-i to Hawaii \'ia the Pacifi Torthwe t ha been incr a ed to three jet round trip ftiaht a week and on pre ent chedule pa enoer may for e ample lea e \ \ 1a hington. D . .. at 1 p.m .. Detroit at 2: 50 p.m .. ).1 I inn apoli - t. Paul at +: 05 p.rn. and arri\'e in Hono- lulu on Northw t' 720B fan-j t hortly after 9 p.m. on th am day. Jet en-i e into the important Florida mark t wa inaugurated late in the year. in time for th height of ,,inter ,acation tra, l. Xorthwe t now off r a choi e of e" ral jet flight daily lo ).Iiami and other Florida ci ti . Torthwe t irline jet chedule are augmented by a omprehen i,e pattern of fliaht in the jet-prop Elec- tra II. Thi aircraft provide hort- egrnent fliaht time~ omparing fa,orabl ,,ith pure-jet time becau e of it extreme maneuverabilitv in the ,icinit\' of airport - for e ample. 1 hour. 15 minute from the Twin iti to ,hicago and 1 hour) 35 minute from Detroit to ST \Va. hino-ton. IL ha proved to be an extremely efficient and conomi al airliner to operate on both hort and me lium-rano-c flight egm nt and into many of the . ma! !er citi crv -d by orlhwe t. notber d \' lopmcnt in the pa L year wa convcr ion of fi\ NW Dougla D -7 ,' to a nexible DC-7 / f c nfiguration with a capability for a 37,000 pound all- caroo !if t or, in varying argo-pa enger combinations, a maximum of 95 cat in the a ll-pa enger version. This convcr ion ,viii cnhan c the revenu potential of thi pi ton- ngined type in a variety of ervice including dome tic and international freight and mail chcdules. low fare pa enger ervice , commercial charter and go\'crnrncnt contract work. Our exten ive re-equipment program has made a number of our pi ton aircraft urplu and we have undertaken to di po e of these aircraft al the mo t favor- able term po ible. In 1961 we old five DC-6B's and our remaining fleet of eight DC-4's, a well a additional pare eno-ine and pare part . While we move forward in 1962 in g-ood competitive po ition, we are continuing to evaluate future equipment needs and are tu dying the various typ s of jet aircraft v:hich may be uitabl for fleet expan ion in the future. FACILITIES AND CUSTOMER SERVICE Your Corn pany ha recognized iL responsibility Lo prmide cu tom er Cn'ice a advanced and efficient as the ne,, flight equipment now in the air. To this end a parallel program of modernization of ground facilities and ervicc- ba been accelerated during the past year. In July, 1961, re pon ibility for all customer services wa pla ed in one department combining the functions of communication , r ervation , tation operations food enice and in-flight cabin ervice. In addition, many irnpro\' d facilitie have been added to make our service more attracti\e and convenient for the traveling public. One of th principal f eatur of this program ha been the occupancy of n w airport facilitie by your Company in recent month . with more cheduled for the near future. To date, Northwe t has occupied space in new terminal at Atlanta M anila Cbicao -O'Hare and Min- neapoli - t. Paul and in a new terminal concourse addi- tion al cattle-Tacoma. cbedule::l for completion in 1962 arc your Company' unit air terminal at N ew York' Idlewild International Airport and the new Dulles International Airport " hich will en-e " a hington, D. C. Terminal con truction al o is under way in \1 \ innipeo- Edrnonton and Honolulu. In the corning year orthwest will introduce econd-le\el jet pa enger loading facilities at four of it major dom tic terminal . J w hangar facilitie at Detroit M etropolitan Airport and ,hicago' O'Hare International irport were oc- cupied by Northwe t in 1961. Photog raphs, fop to botfom-Norfhwesf Orienf Airlines occupied n2w facil ities af several airports in 1961 and early 1962: New terminal af Minneapolis-Sf. Paul, dedicated in January, 1962. c, New South Concourse at Seattle-Tacoma, May , 1961. Chicago-O'Hare , January, 1962. Construction continues (restaurant buildinq , left background}. Ne w terminal af Atlanta, dedicated in May , 1961. ornpletion of our ".\1ain Ba on. trucrion program wa accompli hed in 1961. In Jun ,,e occupied the ne,,._. G neral Office building adjac nt to our main- tenance and o,erhaul facilitie at th Minn apoli - t. Paul International irport. Operation in thi , e 11- integrated facilit ' are aided by many improvement in enic equipment. The Main Ba erYed by a n \\' tel phone y tern which permit direct im,ard dialino- to all ~orthw t irline headquarter office ; ale offi e in the Twin 1t1 and N \\ airport in tallation . he ~fain Bae al o i inter-conn ct d ,,ith t lephone y t rn in many citie on our route by mean of economical I a d Tel- pak circuit, p rmitting prompt and economical phone communication among ~ orthwe t' headquarter and major line tation . Exten ion of thi arrangement to ad- ditional ~ \\ office will b accompli hed during 1962. ommuni ation ha\e be n impro,ed furth r I y in- tallation in 19rl of the mo t up-ro-dat automati l I - type witching-c nt r quipm nt. Thi enter lo ated in th ompany' headquarter , i onnected by direct teletype circuit with O office throughout the .,,nited tate . pproximately 15.000 me ao- are handled each clay through the enter. with deli\ ry peeded by the au torn a tic . y t rn for tran fer of incoming and outgoing me ag;e ,,hich r placed the fonner manual tape procedure. Our ne,, headquarter al o hou th T ni\ac auto- matic re en"ation y tern en-ing 15 cirie on our d me - tic route tructure with high peed re enation enice; toring and controlling the imentory of eat available on more than 100 flight a day. Pa enger re rrntion may be accept d on the c ni,ac com put r for any dat up to 11 month in the future. The peed with \\'hich thi y tern operate pro\ide for greatly impro\ d eni e to our pa nger . ir-to-ground radio communication al o ha\ b en modernized. comprehen i\e proo-ram for centraliza- tion of air-ground radio facilitie wa plann d during 1961 and \\'iil b implement d on a proQ'"Te ive ba i in 1962. n completion of thi program all of ~ .,,W dom tic air-around radio tation . tran mitting and re- cei\ing from r mot location in 25 itie along the air- line' route , will be linked b) lea ed telephone i.rcuit to control po ition in the General ffice building. tralization of radio facilitie will re ult in reduced and will provide for more efficient en route communica- tion and more rapid di tribution of flight movement report to th many office \\'hich r quir uch infor- mation. Of pecial note wa the inauguration during 1961 of a continuou maintenance program for our jet aircraft. Prior to the introduction of thi program major O\er- haul , a accompli h d by remo\ino- each aircraft from er ice for a period of approximate! ' two , eek after ach 2.500 hour of flying. In the continuou mam- Photographs , fop to boffom-New Main Base hcuses a greaf variet y of service fu nctions. Examples: Efficienf computer room is fh e hearf of North west's Un ivac electron ic reservations system. 0 Electra II propeller hub checked in propeller shop. Controls in enqine test build ing duplicafe those in airplane cockpit . Modern Right kitchen is capable of producin g 10,000 in-Rig ht meals per do y. tenance proo-ram, portion of the overhaul work a ign- ment are allocated to each of the line maintenance check period , performed every night and during normal layover . The re ult i increa ed utilization and the ability to keep the e high-co t aircraft in service during peak traffic period . 11 14 pure-jet aircraft thus are kept working and producing re\enue, with maintenance performed in off-peak hours. Thi exten ive program of ground facility moderniza- tion ha been de iQTled, along with our flight equipment program to provide the utmo t in er ice, comfort and con\' nience to our cu tomer . CREDIT AGREEMENTS Early in 1961 your Company amended prior credit agi: ement to provide a portion of the financing re- qmred to purcha e ix Boeing 720B fan-jet aircraft. The ere di t agreement were amended further in 1961 t~ permit acqui ition of three additional 720B' , one by dir ct :purcha e and two under lea e from Boeing with an option to buy. The latter amendment was accom- pli hed without increa ino- our loan limit and without change in repayment date under the bank and insur- ance company agreement . A of Dec mber 31 1961, the total credit line ex- tended your company under current loan agreements had been drawn down. R epayment chedules become effecti\e in 1962 with re pect to bank loan and repay- ment \\'ill continue with re pect to the conditional con- tract of ale on purcha e of the additional Electra II aircraft. s of December 31 1961, there wa a total of 11.521,560 of debt financing repayable during 1962 \,ith the major portion of thi amount payable on and after J une 30. 1962. ROUTES During the year there were no ignificant additions to or chano-e in the route tructure of orthwest Airline . till pendino- before the Civil Aeronautic Board are the petition of ariou carrier applicant for recon idera- tion of the Pre iden t' deci ion of J anuary 19, 1961 in the Tran -Pacific R oute Ca e. That deci ion di approved all application for additional route authority between the "Cnited tate and the O rient. mono- the e is orth,,e t petition for recon ideration of the failure Conversion of five of Northwest Orient Airlines' DC-7C's fo freighter configuration , including installation of an 81 by 124-inch forward cargo door, facilitated an increase in fr eight lift. Piece of paper-making machinery {left) , boarded af Milwaukee en route fo Gothenburg , Sweden , faxed every available inch of the huge doorway. to certificate orthwe t over the Central Pacific route from California to Tokyo, via H awaii. The Civil Aeronautic Board approved the merger of nited Air Line and Capital Airlines during the year. orthwe t and other affected carrier vigorously pro- tested thi action which made United the largest of all nited tates carriers. s a consequence orthwest has been ubjected to ub tantial diversion of trnffic in im- portant market erved by it. Both the establishment of new one-carrier and one-plane competition in certain market and more inten ive competition by United in market in which orthwe t previously competed with Capital have had adver e effects on orthwest revenues. ub eq~ent to the nited-Capital merger, the Civil Aeronautic Board in tituted the United Air Lines, Inc. Competitive Service Inve tigation to consider authoriz- ing_ competition in the Tew York-Cleveland; Cleveland- Chicago, Cleveland-Philadelphia and Detroit-Philadel- 1:hia market - tho e in which United acquired monopo- he a the result of the merger. 1 orthwest is an appli- cant for uch route authorizations. The proceeding still 1s m a preliminary tage before the Civil Aeronautic Board. orthwe t also ha on file with the Board a number of other application for new route authorities to im- prove and trengthen its route structure. These are awaiting procedural action before the Board. PERSONNEL Northwe t Airline ' 5,803 employees, assigned to 55 location in the nited tates Canada and the Orient are working as a team under i~proved policies and pro~ cedure designed to erve the public better and meet the challenge of increa ed competition. The employee who joined orthwe t during the year were able .to adju t themselves rapidly to their new a signm~n~s through cla sroom training in the Company's ne-w trammg center and to perform their work with speed and efficiency. Empha is i being placed on im- prove~ on-the-job training for all employees, to maintain proficiency and to develop new kills and techniques in lin with technological advance in the airline industry. . Durin~ the year collective bargaining agreements were 1gned with three group of personnel repre enting more than 2 000 employee . egotiations with six other units of employee were in progre s during the year and settle- ment are expected early in 1962. The co tly trike by flight engineers, which com- menced on a partial ba is on October 11 1960 and wa _expanded to all equipment on Janu~ry 9, '1961 contmued through February, 1961. All aircraft includ- ing jet , now are being operated by a cockpit' crew of three men. Your Company i proud of the fact that more than 60 per cent of it 5 803 employees have more than five ear of ervice. During 1961, the list of those with 25 or more year of ervice increased to 92 employees. STATEMENT OF EARNINGS NORTHWEST AIRLINES, INC. and SUBSIDIARY Year Ended December 31 ., OPERATING REVENUES 1961* 1960 Passenger ........................................................................................... ......... ....... . United tates mail. .......................................................................................... . Foreign mail. .......................................................................... ............................ . Excess baggage ................................................................................................... . Freight and ex pre ......................................................... .................................. . Charter and other tran portation ............................................ ....................... . Mutual Aid Agreement- net- T ote G ..................... ..................................... . Other ................................................................................................................. . OPERATING EXPENSES Flying operations ...................................................................... ......................... . Maintenance .............................................................................. ................. .... .. . Passenger servic ............................................................................................... . Aircraft and traffic servicing ....................... ................ .................... ................ . Reservations, sales and advertising .. ............................................... .......... ...... . Ad . . . d 1 D ;~:\~;i~t~ v:n~n ar!:~~;:ti~~ ... . . . .. . . . ." ." ." ." ." ." ." ." . ." ."."." ."."."."." ." .... ." ."."." ." ."." ." ." ." ." ." ." ." ."." ." ." ." ." ." ." ." ." ." ." ." ." ." .... ."." . ." ." ." ." ... ." 85,970,900 10,473,605 1 22 7 259 914 423 7 528 793 1 481 ,883 2 563 150 892 499 111 052,512 29,268 829 17 252,807 7 178 262 12,445,830 11 ,973 343 6,093 596 17,117,959 101 330,626 $ 9,721,886 OTHER DEDUCTIONS AND INCOME Interest on long-term debt. ............. ........... .................. ........................ ...... ....... $ 4,352,867 Other income, les miscellaneous deduction ....................... .................... .... ... 6,385 $ 4 346 482 EARNINGS BEFORE TAXES AND PROPERTY DISPOSALS .............. ............. $ 5,375 404 TAXES ON EARNINGS (including deferred taxe $2,868 900--1961 ; $993,030- 1960 ari ing from accelerated depreciation methods ) .......... 2,912,300 NET EARNINGS FROM OPERATIONS ... ........................................................ ... $ 2,463 104 PROFIT FROM DISPOSALS OF PROPERTY, le applicable income taxe (1961- $320 500; 1960- $10,000 net credit) ............... ............................. 1198 035 NET EARNINGS FOR THE YEAR ..................................... ................................. $ 3,661,139 $ 97,680,028 9,680,298 1,0Q0,507 1,183 124 10,185 069 822,724 922,128 1 857 601 $123,361 479 $ 37,605 697 22 872 426 8 840,1 :H 15,421,537 13 789 086 5 925.373 14,413,535 $118 867,785 $ 4,493,694 $ 2,683,480 111,729 $ 2,571,751 $ 1921943 996 030 $ 925 913 699 852 $ 1,625 765 ,'